AM Best has commented that the Long-Term Issuer Credit Rating (Long-Term ICR) of “bbb” of American International Group, Inc. (AIG) (headquartered in New York, NY) [NYSE: AIG] remains unchanged following its announcement to pursue a separation of its life and retirement business. AM Best also has commented that the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term ICRs of “a” of AIG’s property/casualty insurance subsidiaries (collectively referred to as AIG PC) remain unchanged. Concurrently, AM Best has commented that the FSR of A (Excellent) and the Long-Term ICR of “a” for the members of the AIG Life & Retirement Group (AIG L&R) also remain unchanged. The outlook of these Credit Ratings (ratings) is stable.
On Oct. 26, 2020, AIG announced its intention to separate its Life and Retirement business segments from AIG. AIG’s board of directors believes a more simplified corporate structure and focused management will lead to increased shareholder value.
Historically, the consolidated group has benefited from the operational profitability and diversification brought by AIG L&R. However, AM Best notes the significant changes in underwriting, volatility reduction actions taken through reinsurance purchases and product portfolio repositioning that have been implemented at AIG PC over the last few years, all of which have improved AIG PC’s operational profile. At this point, AM Best awaits additional necessary details on how this separation will proceed, the impact it will have on the overall capital structure and credit quality at AIG and each segment, along with a planned timeline. AM Best will continue to monitor the situation and react accordingly from a ratings perspective as details arise.
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